The new British prime minister Liz Truss has inherited a crisis which she quickly turned into a rout. She is literally too stupid to be stupid. If there is anyone more stupid in the UK, then it is the Tory faithful who elected her.
Once upon a time Britain had a higher quality leadership such as Winston Churchill. Tory grandees were once those of huge inherited wealth, based primarily on the land. Now they are represented by the greedy, grasping section of the middle classes. Beholden to the money markets and the bankers.
Liz Truss is the reincarnation of her heroine Margaret Thatcher, the epitome of middle class. And just like Thatcher who wasn't for turning but was forced into a U-turn – so now Truss has had to do a humiliating turn around at the Tory party conference – and barely a month into office.
Economic policies of the last 40 years have created a wealth effect (rising house prices) which has contributed to a false perception of wealth. Trussonomics is a repeat of the long discredited trickle down theory that even Biden has called out as bullshit.
Not to be confused with a Liz Truss
Last week her mini budget set out tax cuts and breaks that helped not only the rich, but was skewed towards the financial sector. This theoretically then trickles down to everyone. And people are stupid enough to believe it. But this time not the markets. She has now been forced to withdraw her tax cuts in a U-turn on the first day of her party conference.
Her budget, you see, had immediately created panic on the markets and the pound sterling went into freefall! The Tories have no actual plan to tackle the debt. At the end of the day money doesn’t grow on trees.
The BoE intervened promising to raise interest rates to fight inflation and protect the currency, but it fell on deaf hears when they refused to provide any details. Eventually they had to reverse QT (Quantative Tightening) and once again partake in a QE (Quantative Easing) bond buying exercise to the tune of £65 billion. What happens next month?
In reality the public debt has gone up to a phenomenal levels only supportable by artificially low interest rates.
This is a currency crisis.
£££
As sterling falls against the dollar, imports become more expensive. It is likely petrol prices will soar as will food prices. To fight the inflation the BoE is pursuing a policy of raising interest rates. Currently at 2.25% (which is it’s highest since 2008), a doubling of this will cause massive pain for many people.
What could that do to the Thatcherite idea of a home-owning democracy?
££££
UK Tory fantasy land expands to the Brexiteers who are adamantly delusional that Brexit will usher in prosperity for all. Their leader Jacob Rees-Mogg is to all intents and purposes a loony. Known in the House as the Honourable Member for the Eighteenth century. Is he the brains behind Liz Truss because she certainly doesn’t have any of her own!
Truss is the perfect reflection for the nostalgia felt for Britain’s great past. Leading to a risible view of the UK’s position in the world. Britain was recently overtaken by India, its former colony, as the fifth richest country in the world.
The new PM's first action in office was a trip to the US on which she announced that the long awaited (Brexit vaunted) US-UK trade deal was on the back burner. For years. Then at the UN discussion on Ukraine Liz Truss, posturing as the leader of the free world, must have irritated Joe as he’s now quoted on record as calling her “dumb” and not to be treated seriously. Meanwhile she’s threatening Russia with nuclear weapons.
Truss further annoyed the Americans with her position on Northern Ireland post Brexit.
The reality is that having left Europe, with no trade deal from the Americans, the UK is looking rather alone and defenceless and in the middle of an economic hurricane. One thing for sure, Truss and her Thatcherite economics offer no solution to the growing list of social, political and economic problems facing the UK.